Richardson Electronics (NasdaqGS:RELL) - Share price, News & Analysis

RELL fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	4/6
Past Performance	2/6
Financial Health	6/6
Dividends	3/6

RELL Stock Overview

Richardson Electronics, Ltd. engages in the power and microwave technologies, customized display solutions, and healthcare businesses in North America, the Asia Pacific, Europe, and Latin America.

Rewards

Trading at 83.9% below our estimate of its fair value

Earnings are forecast to grow 31.32% per year

Became profitable this year

Risk Analysis

High level of non-cash earnings

Shareholders have been diluted in the past year

Richardson Electronics Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Richardson Electronics
Historical stock prices
Current Share Price	US$15.50
52 Week High	US$16.24
52 Week Low	US$7.20
Beta	0.60
1 Month Change	10.79%
3 Month Change	26.02%
1 Year Change	82.57%
3 Year Change	176.79%
5 Year Change	159.63%
Change since IPO	40.91%

Recent News & Updates

May 11

Richardson Electronics: A New-Age GE, Growth Conglomerate In The Making

Richardson Electronics has widely outperformed the U.S. equity market on the back of stellar underlying growth characteristics in 2021-22. The invention of an ultracapacitor to store energy for windmills could support another stretch of oversized gains for investors. Trading near its net asset liquidation value, with more cash than total liabilities, downside appears limited. An above-average 2.0% dividend yield is noteworthy and desirable from a high-growth investment holding.

Shareholder Returns

	RELL	US Electronic	US Market
7D	8.7%	4.5%	6.6%
1Y	82.6%	-19.7%	-18.4%

Return vs Industry: RELL exceeded the US Electronic industry which returned -19% over the past year.

Return vs Market: RELL exceeded the US Market which returned -18.5% over the past year.

Price Volatility

Is RELL's price volatile compared to industry and market?
RELL volatility
RELL Average Weekly Movement	7.2%
Electronic Industry Average Movement	7.4%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.6%
10% least volatile stocks in US Market	3.2%

Stable Share Price: RELL is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: RELL's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1947	389	Edward Richardson	https://www.rell.com

Richardson Electronics, Ltd. engages in the power and microwave technologies, customized display solutions, and healthcare businesses in North America, the Asia Pacific, Europe, and Latin America. The company’s Power and Microwave Technologies Group segment provides engineered solutions, power grid and microwave tubes, and related consumables; technical services for microwave and industrial equipment; flat panel detector solutions, replacement parts, tubes, and service training for diagnostic imaging equipment; customized display solutions; and power conversion and RF and microwave component for broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology applications. Its products are used to control, switch, or amplify electrical power signals, as well as are used as display devices in alternative energy, healthcare, aviation, communications, industrial, marine, medical, military, scientific, and semiconductor markets.

Richardson Electronics Fundamentals Summary

How do Richardson Electronics's earnings and revenue compare to its market cap?
RELL fundamental statistics
Market Cap	US$211.75m
Earnings (TTM)	US$11.53m
Revenue (TTM)	US$213.46m

18.4x

P/E Ratio

1.0x

P/S Ratio

Is RELL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RELL income statement (TTM)
Revenue	US$213.46m
Cost of Revenue	US$145.58m
Gross Profit	US$67.88m
Other Expenses	US$56.35m
Earnings	US$11.53m

Last Reported Earnings

Feb 26, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.84
Gross Margin	31.80%
Net Profit Margin	5.40%
Debt/Equity Ratio	0%

How did RELL perform over the long term?

See historical performance and comparison

Dividends

1.5%

Current Dividend Yield

28%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is RELL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RELL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RELL. This is calculated by dividing RELL's market cap by their current preferred multiple.
What is RELL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$211.75m

RELL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.8x
Enterprise Value/EBITDA	10.5x
PEG Ratio	0.6x

Price to Earnings Ratio vs Peers

How does RELL's PE Ratio compare to its peers?

RELL PE Ratio vs Peers

The above table shows the PE ratio for RELL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	13.1x

Forward PE

Price-To-Earnings vs Peers: RELL is expensive based on its Price-To-Earnings Ratio (18.4x) compared to the peer average (13.1x).

Price to Earnings Ratio vs Industry

How does RELL's PE Ratio compare vs other companies in the U.S. Electronic Industry?

Price-To-Earnings vs Industry: RELL is expensive based on its Price-To-Earnings Ratio (18.4x) compared to the US Electronic industry average (17.6x)

Price to Earnings Ratio vs Fair Ratio

What is RELL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RELL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	18.4x
Fair PE Ratio	24.7x

Price-To-Earnings vs Fair Ratio: RELL is good value based on its Price-To-Earnings Ratio (18.4x) compared to the estimated Fair Price-To-Earnings Ratio (24.7x).

Share Price vs Fair Value

What is the Fair Price of RELL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RELL ($15.5) is trading below our estimate of fair value ($96.42)

Significantly Below Fair Value: RELL is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: RELL is good value based on its PEG Ratio (0.6x)

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Future Growth

How is Richardson Electronics forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

31.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RELL's forecast earnings growth (31.3% per year) is above the savings rate (1.9%).

Earnings vs Market: RELL's earnings (31.3% per year) are forecast to grow faster than the US market (14% per year).

High Growth Earnings: RELL's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: RELL's revenue (13.7% per year) is forecast to grow faster than the US market (8.4% per year).

High Growth Revenue: RELL's revenue (13.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if RELL's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Richardson Electronics performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

39.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RELL has a high level of non-cash earnings.

Growing Profit Margin: RELL became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: RELL has become profitable over the past 5 years, growing earnings by 39.6% per year.

Accelerating Growth: RELL has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: RELL has become profitable in the last year, making it difficult to compare its past year earnings growth to the Electronic industry (33%).

Return on Equity

High ROE: RELL's Return on Equity (8.9%) is considered low.

Discover strong past performing companies

Financial Health

How is Richardson Electronics's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RELL's short term assets ($147.8M) exceed its short term liabilities ($37.9M).

Long Term Liabilities: RELL's short term assets ($147.8M) exceed its long term liabilities ($3.2M).

Debt to Equity History and Analysis

Debt Level: RELL is debt free.

Reducing Debt: RELL has not had any debt for past 5 years.

Debt Coverage: RELL has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: RELL has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Richardson Electronics's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.55%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RELL's dividend (1.55%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: RELL's dividend (1.55%) is low compared to the top 25% of dividend payers in the US market (4.24%).

Stability and Growth of Payments

Stable Dividend: RELL's dividends per share have been stable in the past 10 years.

Growing Dividend: RELL's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (27.8%), RELL's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: RELL is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

10.2yrs

Average management tenure

CEO

Edward Richardson (79 yo)

32.75yrs

Tenure

US$1,230,517

Compensation

Mr. Edward J. Richardson has been the Chairman, Chief Executive Officer and President of Richardson Electronics Ltd. since September 1989 and has been its Director since 1965. Mr. Richardson served as the...

CEO Compensation Analysis

Compensation vs Market: Edward's total compensation ($USD1.23M) is about average for companies of similar size in the US market ($USD1.72M).

Compensation vs Earnings: Edward's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: RELL's management team is seasoned and experienced (10.2 years average tenure).

Board Members

Experienced Board: RELL's board of directors are considered experienced (8.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.4%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/02/26
Annual Earnings	2021/05/29